Uber investors seek to oust Benchmark after ‘destructive’ lawsuit -report
11 Aug, 2017
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SAN FRANCISCO (Reuters) – A lawsuit filed by investor Benchmark Capital against ousted Uber Chief Executive Travis Kalanick has raised the ire of three investors who on Friday asked the venture firm to divest its shares and step down from the ride-services company’s board, according to an email published by news website Axios.
Investors Shervin Pishevar of Sherpa Capital, Ron Burkle of Yucaipa Companies and Adam Leber, an angel investor who works for music company Maverick, signed the email and said Benchmark’s lawsuit harms Uber Technologies Inc’s [UBER.UL] valuation, interferes with fundraising efforts and impedes the company’s search for a new CEO to replace Kalanick, according to the email sent to shareholders and board members.
Benchmark’s tactics are “ethically dubious and, critically, value-destructive rather than value enhancing,” the investors wrote in the email, according to Axios.
Reuters confirmed the email with a source close to one of the investors. The three investors and Benchmark did not immediately respond to a request for comment.
Benchmark filed a lawsuit on Thursday that seeks to force Kalanick off the board and accuses him of concealing a range of misdeeds and scheming to retain power at the company even after he was forced to resign as chief executive in June.
The investors called on Benchmark to remove itself from the company board and divest enough of its shares so that the firm would no longer have the right to appoint other board seats.
“We have investors ready to acquire these shares as soon as we receive communication from Benchmark that they are willing to withdraw their lawsuit and sell a minimum of 75 percent of their holdings,” the email said, according to Axios.
The investors are opening a new front in a highly unusual public battle for Silicon Valley, illustrating the difficulty Uber is having recovering from a series of scandals. It is rare for a venture firm to sue the central figure of a valuable portfolio company, and equally unexpected for investors to make a counter-move to push out a fellow investor backing the same company.
The board had a meeting scheduled for Friday, Axios said.
Reporting by Heather Somerville; Editing by Lisa Shumaker
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